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Is Globalization a Threat or an Opportunity to Developing Countries?


Through technological, economic, and social development within world economies, the resent time phenomena demonstrates a state where integration in these areas is increasingly binding countries and economies together such that the world becomes more or less a global village. Thai, Rahm and Coggburn (2007, p.2) indicates that globalization involves continuous economic growth that goes beyond geographical boundaries as a result of liberalization of international trade and investment policies. In addition, the indication by O’ Loughlin, Staeheli and Greenberg (2004, p. 163) on globalization shows that, economic globalization includes not only international trade, but it also includes flows of other economic resources (such as human recourse) through foreign investments which accompanies financial instruments, both private and governmental, across world economies.

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The topic on the effects of globalization has generated a lot of debate in trying to analyze its contribution to either the success or failure of some aspects of economies in some individual economies and also in the entire world’s economy. While globalization has played a major role in the acquisition of vital goods and services to countries, there have been raised concerns that globalization is affecting some countries economies adversely.

Positive impact of globalization to developing countries

A major direct benefit of globalization to developing countries in various parts of the world is the free flow of capital, labor, goods and services. Developed countries have also benefited by increasing their market through extending their investments beyond regional boundaries. This aspect of globalization has played a major role in ensuring the success and stability of developed countries economies. Gupta (1997, p. 30) suggests that the prosperity of developing countries depends on the benefits acquired by utilization of the liberalized international trade and labor mobility. Also, some developing economies e.g. China and Korea have been able to reap the benefits of free trade and have managed to compete with developed countries like Germany and France in international market that were superior as far as industrialization was concerned in the early 20th century. Positive utilization of liberalization is therefore an opportunity for developing countries to make foundation for economic prosperity.

Globalization has also led to free flow of labor across regional boundaries. Currently, upcoming African countries are exporting labor and experts from other parts of the world while undertaking developments especially in infrastructure and institution development and management. Currently, China is a major focus as far as experts and labor importation is concerned especially in African countries. While this aspect can be viewed as negative impact to the importing country, standardization to world class in most construction projects and institutions is ensured by applying the latest technologies and ideas usually from developed and developing countries..

Most developing countries lack the technology to make their products into finished products. This aspect has rendered them to be exporters of raw materials and importers of finished goods. This aspect has made the developing countries to also participate positively in the international market while reaping the benefits of foreign earnings due to exports. This phenomenon is especially evident in African countries where products like agricultural produce and minerals are exported while raw. The exporting countries therefore strive to maximize on productivity while maintaining the world standards so as to attract maximum gains from the liberalized world market.

Globalization of politics is also a major area of concern. Institutions like the International Monetary Fund (IMF), World Bank and other non-governmental organizations have played a major role in integrating economic and political issues in different countries. Such global organs’ influence in the political and social-economic decisions in the world leads to promotion of democracy and observation of human rights. Center for Trade Policy Studies (2009: Para 3) views that, greater citizens freedom both individually and collective is enhanced through globalization of politics since governments are monitored to ensure citizen’s freedom and properties are safeguarded. In addition, international courts of justice have been established, where foreign influence -political and economic- is used to promote justice and democracy in countries experiencing conflicts.

Global envision (2003: Para 2) outlines globalization as a concept to be viewed in two folds- Globalization from the top and globalization from below. Globalization from top is viewed as the effects that are derived from developed countries on introduction of new ways of life and promotion of better living standards e.g. access to better cars, music, high living standards etc to developing countries. On the other hand globalization from below involves aspects like the growth of organs that promote human rights e.g. Amnesty international, People Against Torture, Africa Watch that originates from grass root level and spread to other parts of the world.

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Adverse effects of globalization to developing countries

While globalization has been viewed as a solution to many social- economic problems in different parts of the world, its benefits are not without risks. Serious adverse effects have been experiences over time especially those arising from volatile capital movements. As a result of these negative impacts, IMF has embarked on helping economies manage or reduce these risks, through economic analysis and policy advice and through technical assistance in areas such as macroeconomic policy, financial sector sustainability, and the exchange-rate system (Held and McGrew, 2003, p. 478).

The adverse effects of globalization have been experienced most in the relatively unstable economies of the developing countries. Due to integration, the adverse social- economic issues affecting the mighty participants in the world economy find their way to the developing nations. This poses a major challenge to such interaction and integration as evident in the current world economy recession.

According to Grey and Dilyard (2005: p. xv) close interaction of foreign countries in financial and economic aspects leads to either country experiencing the repercussions of events that take place in the other country. Also, economies are vulnerable to adverse disturbances being experienced in the other country whenever a mutual economic relationship exists.

On looking at globalization and developing countries, a situation of higher dependency and influence from developed countries is inevitable. Due to liberalization, different ideologies have been suggested to the developing countries on ways to improve their economies and achieve social-economic development. The question remains how much of the proposed benefits for economic growth have reaped benefits in the developing world as a result of financial integration; Prasad, Rogoff, Wei and Kose (2003) doubt that financial integration delivers a higher rate of economic growth.

Global Envision (2003) links globalization with capitalism. Extreme capitalism has been witnessed where players in the market try to maximize profit my employing cheap labor mechanisms, and cheap raw material sources. This has led to deterioration of welfare of workers in certain industries within the developing nations, evident from low wages and salaries and low cost of raw materials. The source country therefore does not derive maximum benefit from its resources thus such economies remain poor while the living standards of her citizens remain low.

The increase in inequality between the developed and the developing nations has been viewed as a negative impact of globalization. Due to liberalization and free trade, homegrown investments face competition from mighty foreign companies, posing a danger of closure of such industries and loss of jobs and business opportunities.

Distribution of illegal fire arms, illegal drugs, and terrorism among others are some of the social issues linked with globalization. Developing countries have to counter the problem associated with the access of such kind of illicit goods. Illegal fire arms and terrorism poses a great risk to the stability of developing countries’ governments and their citizenly.

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In general opposition to globalization has been raised, mainly concerning adverse effects to environment, increase in poverty, unemployment, and social disintegration.


Globalization is inevitable. This aspect is due to the fact that no country or economy is self sufficient. Outsourcing is an aspect of economy that leads to interaction and integration. The developing countries therefore should reap the full benefits of globalization while trying to solve its negative impacts. Globalization has been viewed as promotion of extreme capitalism by the developed countries where the developed countries strive to exploit the developing countries, leading to a large economic gap between the rich and the poor countries where the rich continue to become richer and the poor continue becoming poorer.

Whether globalization is an opportunity to developing countries economies or a threat depends on many factors which include the political stability in a country, the available resources, and level of industrialization among others. To find opportunity in globalization, the developing countries must focus on its benefits. Birdsall (1999) indicates that, developing countries have tremendous opportunities to reap from globalization. However, the major challenge is to identify those benefits without incurring a lot of expenses when trying to implement those economic decisions.

Reference list

Birdsall, N. (1999) Globalization and the Developing Countries: The Inequality Risk. (Online). Web.

Center for Trade Policy Studies (2009) Benefits of globalization. Web.

Grey, Peter H. and Dilyard, John R. (2005) Globalization and Economic and Financial Instability. Cheltenham, Edward Elgar Publishing Limited UK.

Global envision (2003) Developing Countries and Globalization. Global envision: the Confluence of Global Markets and Poverty Alleviation. Web.

Gupta, S. D (1997) The political economy of globalization. NY, Springer.

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Held, David & McGrew, Anthony G. (2003) The Global Transformations Reader: An Introduction to Globalization Debate. NJ, Wiley-Blackwell.

O’ Loughlin, John et al. (2004) Globalization and Its Outcomes. NY, Gilford Press.

Prasad, Eswar S. et al (2003) Effects of Financial Globalization on Developing Countries. International Monetary Fund.

Thai, Khi V. et al. (2007) Handbook of Globalization and Environment. CRC Press.

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